🔍First real tokenized stocks are here

valuable weekly insights

GM friends.

Here’s what I’ll cover today:

🔎First real tokenized stocks are here

📊 Crypto chart of the week

🗞️ The latest DeFi news

Today’s email is brought to you by Apyx - A dividend-backed stablecoin protocol

Check out the Apyx 2.0 announcement here.

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🔎First real tokenized stocks are here

If you’ve been following the tokenization sector, you know that projects like Ondo Finance and xStocks already launched on-chain stocks a while ago.

However, those historically came with several limitations and are better seen as wrappers rather than on-chain stocks with real ownership.

But a few days ago, Backpack released the first real US stocks and ETFs.

I’ll explain why I found them particularly interesting and what I mean by “real”.

There are several things that make Backpack’s tokenized assets stand out from other tokenized stock products:

• Real ownership under New York law - This matters as it ensures that even if Backpack declares bankruptcy at some point, the holders of its tokenized stocks would retain legal ownership of their shares

• They have the same legal framework as Robinhood and Fidelity

• Cash dividends are offered to their holders

• Brokerage transfers are supported - Backpack is the first tokenization platform that allows you to transfer your on-chain stocks / ETFs to other brokers

This last point is what really caught my attention.

If at a certain moment you decide to transfer your on-chain stocks off-chain, Backpack is the only crypto platform that actually allows you to do that.

You can transfer them in and out to Interactive Brokers, Robinhood, or other brokers and have access to 1:1 redemption into the underlying real share.

In other words, you legally own the stock, not just a synthetic representation of it.

I think stuff like this is really important because I’ve talked with several people about tokenized stocks over the past months, and the concern I heard repeatedly is this:

"Why buy stocks on-chain when I can just buy them through a traditional broker, which is regulated and comes with significantly stronger legal protections?"

The big deal about Backpack’s on-chain stocks is that they offer real ownership and are regulated, unlike most other tokenized stock products.

And the demand for their product is proving to be pretty high.

In just a few days since launch, Backpack has already captured 74% of the tokenized equities volume across spot DEXs:

Source: @Degeneratenews

I believe that tokenization will eventually bring trillions of dollars on-chain.

But for that to happen, investors need confidence that tokenized assets provide the same ownership rights and protections as their traditional counterparts.

That's why I think what Backpack shipped is an important milestone.

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Together with Apyx

Apyx’s response to its first major stress test

Over the past few weeks, STRC suffered its largest depeg yet.

As the largest STRC-backed DeFi Protocol, Apyx has also been impacted by this, with apxUSD and apyUSD suffering a depeg.

In response to this, Apyx announced a new framework called Apyx 2.0.

The goal is to increase the protocol transparency and clarify how it handles redemptions during such events.

Here’s what Apyx 2.0 brings new:

• Two distinct metrics (redemption value and total collateral value) will be published on its transparency dashboard going forward

Redemption Value is the price at which minting and redemptions occur.

• An RFQ redemption mechanism - On top of the protocol’s automated redemption mechanism, users will also be able to submit redemption requests through an RFQ process that allows approved counterparties to complete them at better rates

• The overcollateralization buffer will not be used for redemptions. All of it will be allocated to STRC, with the yield generated given to the apyUSD holders

And from now on, the buffer will act as a backstop.

In a catastrophic scenario where the protocol is severely affected, the buffer will be used together with all other collateral and distributed pro rata among users.

Thanks to its buffer, apyUSD should always generate a higher yield than STRC.

Learn more in Apyx’s article on Apyx V2 here.

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Chart of the week

Aerodrome is processing 53% of all DEX volume on Base

Source: @Flowslikeosmo

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Crypto meme of the week😂

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The latest developments in DeFi

Aster allocated 99% of its trading fees to token buybacks

Plasma launched Plasma One - a DeFi neobank with up to 4% cashback

Pendle started teasing its expansion to Monad

MegaETH launched MOSS - a new DeFi wallet aiming to improve on-chain UX

Variational started paying dividends on stock or ETF longs

Curve Finance launched LlamaLend V2 on Optimism

Re, an on-chain reinsurance platform, launched its token called RE

Lighter launched Atomic Orders, enabling to long and/or short multiple markets in a single transaction

Hylo introduced Leveraged Tokens for ETFs - enabling getting leveraged exposure to ETFs with liquidation protection

NEAR Protocol announced an incentive program for those using its privacy solution

Coinbase announced plans to launch 1:1 backed tokenized stocks

Morpho teamed up with Zama to launch the first confidential USDC yield vault with built-in privacy

Citigroup announced plans to roll out tokenized shares of private companies

That’s all for this week!

Until next time,

The DeFi Investor

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